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Paytm Money, a digital brokerage platform, has announced a new feature that allows users to apply for an IPO before its opening in the markets. Paytm Money is the first digital broker in India to offer this functionality, and expects it to significantly increase the participation of retail users in IPOs.
Zomato is the first IPO launched with this feature on Paytm Money, and thousands have already used it to place orders over the last two days.
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A user can place an IPO order 24x7 on days when the “pre-open IPO application” feature is enabled. The order is recorded on Paytm Money’s system, and sent to the exchange for processing whenever the IPO opens. The user is continually notified of her application status, to ensure a seamless experience.
Varun Sridhar, CEO of Paytm Money, said in a statement: “Interest in IPOs has surged over the last couple of months, and we have seen cases where users have missed out from applying because of issues like tight schedules during market hours, and demand-led processing delays in the markets. We wanted to make the lives of our users easier and ensure that they don’t miss out on good opportunities.”
A conventional IPO application process is designed around timings and is seen as restrictive
, as users are able to apply only during select market hours over a window of three days. A large proportion of the investing community does not trade actively, and is likely to miss out on some of these IPOs. This is particularly true of millennials and young investors. The pre-IPO application feature is meant for such investors.
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There is also the issue of congestion in servers/networks during popular IPOs, due to high demand during a short time span. As the feature gains traction, it might be possible to spread out the pre-open ipo applications evenly during market hours, reducing the load on exchanges and payment gateways, and ensuring a better experience for market participants, a company statement added.
Paytm Money has also launched a few other advanced features to offer a comprehensive IPO application experience to its users, who can now complete IPO applications with a single click, apply via the shareholder category, and track live IPO subscription numbers.
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